Botswana’s multi-billion Pula manganese project at risk

Government delays, uncertainty over funding commitments and a lack of clarity regarding its proposed participation in the Kgwakgwe Manganese Mine project could threaten the next phase of development and place plans for a multi-billion-pula processing plant at risk.

The project, owned by Giyani Metals Corp, has reached a pivotal stage after nearly a decade of exploration, technical studies and project development.

According to sources familiar with the project, investors are increasingly seeking certainty regarding government's proposed role and financial commitment as the venture moves towards a final investment decision.

The uncertainty comes as the project is being positioned as a key contributor to Botswana's economic diversification agenda through mineral beneficiation, job creation and skills development.

Sources say investors who have supported the project to date are looking for a clear indication of government's intentions before committing funding for the next phase.

Failure to secure the required commitments could result in alternative locations being considered for the proposed processing facility, with South Africa viewed as a potential option due to its established manganese-processing infrastructure.

At the centre of the matter is the government's proposed equity participation through Minerals Development Company Botswana (MDCB).

Sources familiar with the negotiations say Giyani Metals and MDCB had made significant progress towards finalising an agreement and a signing date had been identified. However, the process is understood to have stalled before completion, leaving uncertainty over the government's participation.

According to sources, investors have indicated that prolonged delays could affect future investment decisions. The development has raised questions about the government's readiness to finance its proposed stake and the potential commercial implications of further delays.

Giyani Metals began developing the Kgwakgwe project in 2016, undertaking a Preliminary Economic Assessment, a Pre-Feasibility Study and subsequently a Feasibility Study.

The project has long been viewed as strategically important due to its manganese resource base and potential for downstream beneficiation.

A key component of the development programme was the construction of a demonstration processing plant to test ore from Kgwakgwe and validate the proposed processing technology.

The plant was established in Klerksdorp, South Africa, where specialised manganese-processing expertise was already available and where development costs were considered more practical for a pilot operation.

Engineering consultancy Max63 assisted in the design and construction of the demonstration plant, which successfully validated the proposed technology.

The project attracted support from South African and international investors, including the Industrial Development Corporation (IDC), which funded the demonstration plant and contributed towards feasibility studies.

Sources say the IDC's involvement encouraged MDCB to undertake due diligence and consider acquiring the 15 per cent government stake contemplated under Botswana's mining policy framework.

The proposed government participation has been viewed by stakeholders as strategically important in strengthening local involvement in a project of significant national importance.

The project has evolved into a multinational investment involving Canadian, South African and broader African interests.

Industry sources say the demonstration plant has shown the potential to produce battery-grade manganese products, placing the project within a growing global market linked to electric vehicles and energy-storage technologies.

Global demand for high-purity manganese is increasing as manufacturers seek alternative supply chains and reduce reliance on traditional processing centres.

For Botswana, the project represents an opportunity to move beyond the export of raw minerals to establish a domestic value-addition industry while creating specialised employment opportunities for engineers, geologists and mineral-processing professionals.

The next phase of development depends on securing financing and reaching a Final Investment Decision (FID).

Sources indicate that approximately US$500 million in capital funding has been earmarked for the commercial processing facility, although final funding arrangements remain linked to the completion of outstanding agreements involving Botswana.

The IDC is understood to have invited MDCB to participate in the next phase and provided a period for consideration. Sources say that period has now expired without a definitive response.

According to industry stakeholders, the resulting uncertainty has affected not only Giyani Metals but also other financial partners associated with the development. One industry expert, speaking on condition of anonymity,

said Botswana's withdrawal or continued indecision at this stage could raise concerns among investors.

'If the host country does not participate, investors will inevitably seek to understand the reasons,' the expert said.

The expert added that South Africa's existing demonstration plant could provide a significant advantage should commercial operations ultimately be developed there.

The facility is reportedly one of the few demonstration plants of its kind outside China and is viewed as strategically important in efforts to diversify global manganese supply chains.

As a result, the location of the future commercial plant has become increasingly significant.

Sources say continued uncertainty could encourage stakeholders to explore expanding processing capacity in South Africa rather than Botswana, potentially shifting associated investment, technology and expertise beyond Botswana's borders.

The potential impact would extend beyond the loss of the proposed processing facility.

More than P300 million is understood to have been invested in the project's development, while Botswana has also built a growing pool of technical expertise linked to the venture.

After years of technical work and investment, the project is believed to be approaching the stage where a final commercial decision can be taken.

Sources estimate that, once government participation and financing arrangements are confirmed, the project could reach Final Investment Decision within six months.

The growing sentiment among stakeholders is that clarity is now required to prevent further uncertainty. Sources also say prolonged delays have created challenges for Giyani Metals as it evaluates future funding options and investor requirements.

The central question is no longer whether the Kgwakgwe project has been technically de-risked and developed. Rather, it is whether the certainty required to move from advanced development to commercial production can be secured.

For investors who have supported the project over many years, the coming weeks could prove critical. For Botswana, the outcome may determine whether Kgwakgwe evolves into a domestic manganese-processing hub or whether the investment, technology and expertise developed over the past decade are ultimately realised elsewhere.

Efforts to obtain comment from the relevant ministry were unsuccessful at the time of publication.